Stanlib I REIT FY17 Results via Kestrel
Property expense ratio remained flat at 34%
Rental income increased by 12% y/y to Kes 279.4m. 2 assets were acquired mid-year in 2016 so accounted for only 6 months of rental in 2016 vs full year in 2017.
Interest income declined from Kes 111m to Kes 99.8m.
FV gain increased to KES 22m from Kes 8m. Op profit Kes 171.1m in 2017 vs 128.4m. One off REIT costs did not recur in 2017.
Rent escalation on commercial property (ex Greenspan) is 12.5% every 2 years.
The commercial property was funded from cash balances, REIT was under invested in property per CMA regulations prior to this and had sought exemption. 33% of assets was held in cash.
Total property portfolio return was 8.5% vs 8.9% in 2016. Tenant debtors is Kes 42m (excl. provisions), all related to Greenspan mall
Lease expiry profile is staggered and healthy.
Average vacancy rate is 6.5%, all at Greenspan mall (the mall itself has a vacancy rate of 8.1%)
Setting up a cinema at Greenspan mall. 3 screen 3D cinema with total capacity of 300 people. 6,416 sq ft, 10 year lease term, 11.7% yield from cinema vs 7.5% from the mall on average.
Stanlib bought a new commercial building at a price of Kes 850m. Low rise grade A commercial property. 41,300 sq ft, 100% let. 73.8m annual rent, escalation of 15% every 2 years.

currently owns 3 properties [a shopping centre and two semi office light industrial buildings] valued at 2.4b.
The REIT as delivered growth of 221% in earnings for the 6 month period ended 30th June 2017
currently ungeared